JUSTICE SUDIP AHLUWALIA, MEMBER

2. The factual background, in brief, is that the Complainants were enticed by the advertisements and promotional campaigns issued by the Opposite Parties regarding an integrated project offering modular office spaces within a commercial complex under construction. This project was part of a Bus Terminal-cum-Commercial Complex in Sector 57, Mohali. The features of the project were highlighted in a brochure provided by the Opposite Parties. Motivated by the promises made in these advertisements, the Complainants applied for an office unit with the intention of establishing a source of livelihood through self-employment. The Complainant No. 2, holding a Master’s degree in Music, had planned to run a Music Academy from the purchased office space, while the Complainant No. 1, who possessed experience in administration and management, intended to manage the business. The office space offered by the Opposite Parties was integral to this business plan. The Complainants paid a total of Rs. 8,09,200/- as 35% of the cost of the office space through a series of cheques. On 18.09.2012, the Opposite Party issued an Allotment Letter, signed by the Opposite Party No. 4, which detailed the terms and conditions of construction and payment, and formally allotted Unit No. 35, located in Tower C on the 4th floor, as a modular office space. The Super Area of the office space was 289 Sq. Ft. 

3. Despite receiving payments from the Complainants, the Opposite Parties neglected to adhere to the provisions of the Punjab Apartment and Property Regulation Act, 1995 (PAPRA) and continued to accept funds even though no significant progress was made on the construction of the project. According to the terms of the Allotment Letter, the Opposite Parties were required to complete the construction within 60 months from the date of 16.12.2009, making the completion deadline as 15.12.2014. However, the Opposite Parties did not meet this deadline, and no construction work was initiated on the site. 

4. On 07.03.2014, the Opposite Parties issued a letter, signed by Col. (Retd.) CVS Sehgal, CGM, Commercial, notifying the Complainants that the construction schedule had been revised.  The letter stated that Tower ‘A’ would be fully operational by December 2014 and that relocating the Complainants’ office space to Tower ‘A’ would result in better footfall and greater commercial potential. The letter assured the Complainants that details of their new space in Tower ‘A’ would be provided soon.

 

5. On 21.11.2017, the Opposite Party No. 3 issued a letter indicating that the Company would refund the deposits along with interest, subject to approval by the Board of Directors and that the refund would be processed in six equal monthly instalments starting from 01.04.2018. The Complainants also became aware, through public notices, that the Opposite Parties had been served a termination notice by the Greater Mohali Area Development Authority (GMADA) due to the non-completion of construction. Despite this, the Opposite Parties continued to delay responding to the Complainants’ concerns and failed to take any substantive action. On 06.06.2018, the Opposite No. 3 sent another letter to the complainants, requesting an extension until 30.09.2018 to fulfil their promises outlined in previous correspondence. Additionally, GMADA responded to the C&C Mohali Junction Buyer Association, confirming that a termination notice had been issued on 04.04.2016, though the Opposite Party No. 1 had sought additional time for completing the project. Aggrieved with the deficiency of service and unfair trade practice on the part of the Opposite Parties, the Complainants filed their complaint before the Ld. State Commission, Punjab, in which their prayers were -

 

 “i) That to hand over the possession of the office space immediately and upon failure OPs may kindly be directed to refund Rs. Rs.8,09,200/- alongwith interest @ 18% per annum from the date of its deposit till the date of actual payment.

 

ii) The OPs may also kindly be directed to pay a sum of Rs.3,50,000/- on account of mental agony, physical harassment, apart from other financial loss and

 

iii) The OPs may kindly be directed to pay litigation charges of 

Rs.31000/- to the complainant.”

 

6. The Opposite Parties filed their Written Statement against the Complaint before the Ld. State Commission with the contentions being that the Complaint is not maintainable before this Commission as it falls outside its pecuniary jurisdiction under the Consumer Protection Act, 1986. The Complainants have sought a refund of Rs. 8,09,200/- with interest at 18% per annum, compensation of Rs.3.50 lakhs, and litigation costs of Rs. 31,000/-. The total sum of these claims is less than Rs. 20 lakhs, which places the matter beyond the pecuniary jurisdiction of this Commission. This is further supported by the decision of this Commission in “Ruhi Seth v. IREO, 2018(1) C.P.J. 298”, wherein it was held that in cases where a refund is sought, the specific amount prayed for is what determines pecuniary jurisdiction. As the refund amount in the present case is below Rs.20 lakhs, the complaint should be dismissed on this ground;

7. It was also contended that the Complainants do not fall under the definition of “Consumers” as per Section 2(1)(d)(ii) of the Act. They had sought to purchase the unit in question for commercial purposes, and there is no credible evidence to support their claim that the unit was intended for earning their livelihood through self-employment. The Complainants have failed to substantiate their claim that they intended to use the unit for a Music Academy. They have neither provided details of any business setup nor taken any steps towards establishing such an Academy since booking the unit in 2012. Additionally, the unit booked is a commercial office space within a commercial project, further disqualifying the Complainants from being considered “Consumers” under the Act;

8. It was further stated in the Written Statement that the Complainants have misrepresented material facts. In the Application for Allotment, they listed themselves as housewives without mentioning any profession related to music. This contradicts their claim of booking the unit for self-employment. Their intent appears to have been speculative, aiming to sell the unit at a premium. Due to the downturn in the real estate market, they are now attempting to retract their investment, making the current complaint a belated effort to avoid financial losses. Therefore, the complaint lacks merit and should be dismissed on this ground as well;

9. Further, according to the Respondents/Opposite Parties, the Allotment Letter contained an Arbitration Clause (Clause 1.24), which mandates that any disputes between the parties to be settled through arbitration. The Complainants had bypassed this agreed-upon dispute resolution process and had directly approached the State Commission, violating the terms of the contract. Hence, the complaint is not maintainable in view of the binding arbitration clause.

10. Besides, the Complainants had also allegedly failed to meet their contractual obligations, including timely payment of instalments as stipulated in the Allotment Letter. As a result, they cannot claim that the Opposite Parties have failed to fulfil their obligations or have been deficient in providing any services. The delay in construction is not a valid ground for the Complaint, as there was no binding time frame for completion mentioned in the contract, and any delays were subject to Force Majeure conditions.  Thus according to the Opposite Parties, the Complainants were not entitled to any relief, and the complaint was liable to be dismissed on the aforesaid grounds.

11. The Ld. State Commission vide the impugned Order dated 01.03.2019 dismissed the Complaint as being not maintainable. The relevant extracts of the impugned Order are set out as below –

“9. We have given our thoughtful consideration to the respective contentions raised by learned counsel for the parties.

10. Before discussing the case on merits, the objection raised by the opposite parties is that the complainants are not consumers and there is no relationship between each other and the commercial space booked by the complainants is for speculative purposes. In this regard, we have perused the record, it is admitted that the complainants were allotted a Modular Office Space vide allotment letter dated 18.09.2012, Ex.C-8 in the joint name. In the complaint, the complainants pleaded that complainant no.2 is having qualification of Masters in Music and wants to run a music academy for music aspirants whereas complainant No. 1 has got experience in administration and management. The complainants in their complaint have failed to co-relate that with different qualifications; how they would be able to use the space as the qualifications of both the parties are different from each other. Also, there is no blood relation between the complainants. Moreover, no application for filing the joint complaint by mentioning any cogent reason was filed, which is against the provisions of Section 12(c) of the CP Act. The relevant Section 12(c) is reproduced hereunder:-

“12. Manner in which complaint shall be made (1) A complaint in relation to any goods sold or delivered or agreed to be sold or delivered or any service provided or agreed to be provided may be filed with a District Forum by - 

XX XX XX XX XX XX

(c) one or more consumers, where there are numerous consumers having the same interest, with the permission of the District Forum, on behalf of, or for the benefit of, all consumers so interested;”

11. In the absence of any cogent reasoning that how they are co-related to each other and what would be the purpose of purchasing the modular space by both the complainants and how they fall within the definition of consumer of the opposite parties by purchasing unit on joint names, where the complainants have no blood relation, complaint is not maintainable. They are held to be not consumers.

12. Sequel to the above, the complaint filed by the complainants is dismissed being not maintainable. ”  

 

12. This Commission has heard the Ld. Counsel for the Appellants, and perused the material available on record. 

13. In their Complaint, the Appellants had sought possession of the property for establishing a Music Academy, which would serve as their means of self-employment. This intent falls squarely within the ambit of Consumer Protection laws, as the Complainants’ purpose is clearly one of earning a livelihood through self-employment.  Further according to the Appellants, the definition of “consumer”, the judgment of the Hon’ble Apex Court in “Shrikant G. Mantri v. Punjab National Bank, CA No. 11397 of 2016” is to be considered, of which relevant extracts are set out as below – 

“39. In   the   case of Paramount Digital Colour Lab (supra), this Court was considering the case of unemployed graduates, who had started a business of photography in partnership for self-employment and for their livelihood. For the said purpose, they had purchased an advanced photo processing, developing and printing machine.  It was the case of the appellants therein that the respondents, despite having the knowledge that the machine was not working properly, had unfairly and carelessly sold the same to the appellants. As such, the appellants were required to file a complaint under the said Act.  The State Commission had allowed the complaint. In appeal, the National Commission held that the appellants   were   not   the  consumers  as   envisaged   under Section 2(1)(d) of the said Act, since the purchase of the machine was for commercial purpose.   Reversing the view taken by the National Commission and upholding the view taken by the State Commission, this Court observed thus:

“12. In this case, since the appellants have purchased the machine, Section 2(1)(d) of the Act is applicable. “Consumer” as defined under Section 2(1)(d) of the Act does not include a person who obtains goods for a “commercial   purpose”. The Explanation supplied to Section 2(1)(d) clarifies that “commercial purpose” does not include use by a person of goods bought and used by him and services availed by him exclusively for the purposes of earning his livelihood by means of “self-­employment”. If both these provisions are read together, it leads to the conclusion that if a person purchased the goods for consideration not for any commercial purpose, but exclusively for the purposes of earning his livelihood by means of “self-­employment”, such purchaser will come within the definition of “consumer”. If a person purchases the goods for a “commercial purpose” and not for the purposes of earning his livelihood by means of “self-employment”, such purchaser will not come within the definition of “consumer”. It is therefore clear, that despite “commercial activity”, whether a person would fall within the definition of “consumer” or not would be a question of fact in every case. Such question of fact ought to be decided in the facts and circumstances of each case.

13. “Self­-employment”   necessarily   includes earning for self. Without earning generally there cannot be “self-­employment”. Thus, if a person buys and uses the machine exclusively for the purposes of earning his livelihood by means of “self-employment”, he definitely comes within the definition of “consumer”. In the matter on hand, the quality of ultimate production by the user of the machine would depend upon the skill of the person who uses the machine. In case of exigencies, if a person trains another person to operate the machine so as to produce the final product based on skill and effort in the matter of photography and development, the same cannot take such person out of the definition of “consumer”.”

40. This Court, on facts in the said case, found that the appellants therein were unemployed graduates and had bought the said machine for their own utility, personal handling and for their small venture, which they had embarked upon to make a livelihood. This Court further found that this was distinct from large-scale manufacturing or processing activity carried on for huge profits. It was, therefore,   held that the appellants herein would be consumers within the meaning of Section 2(1)(d) of the said Act.”

(Emphasis Supplied)

 

14. The Complainants herein are clearly not speculative investors but genuine consumers who intended to use the property for a productive and vocational purpose. The Complainants have placed on record the certificates regarding “Master of Music” and “Diploma in Computers and Information Management” (at Pg. 67-69 of Paperbook). The Complainants have averred before the State Commission as well here that they intended to use the property only for opening a Music Academy. The Respondents contended that the purpose stated is sham, but they have not placed any such document on record to this effect. It is the settled legal maxim that onus of proving a fact rests on the party who alleges such fact. 

15. On the other hand, on a close consideration of the pleadings on record, it transpires that both the Complainants come from the same family, being sisters-in-law of each other.  The Complainant Harminder Kaur is the wife of Mr. Harminder Singh, while Co-Complainant, Amanjot Kaur is the wife of Preet Mohinder Singh.  The aforesaid husbands of both the Complainants are full brothers both being the sons of one Sardara Singh. It is also on record that one of the Complainants holds the degree for “Master of Music” and the other holds a diploma in “Computers and Information Management”.  In this view of the matter, there is no reason to doubt that they had applied for the property for productive and vocational purpose and for the purpose of earning their livelihood, by jointly starting a Music Academy in the same, in which the management would be done by Complainant No.1-Harminder Kaur and actual teaching of Music would be done by Complainant No. 2- Amanjot Kaur. 

16. Further, the Respondents did not appear before this Commission for a long time on any date after 23.6.2023 and have not contested the Appeal meaningfully, nor any Written Submissions/arguments have been filed from their side.

17. In view of above observations, this Commission is of the view that the Ld. State Commission had erred in dismissing the complaint on the ground of non-maintainability. It is undeniable that there was an undue delay on the part of the Respondents in completing the construction and handing over possession of the property. Such delays are not only a breach of Contract but also a gross violation of the Complainants’ rights as consumers. Forcing customers to wait for extended periods without delivering the promised property, while also holding on to their hard-earned money, is unethical and legally untenable. The Complainants have suffered due to the Respondent’s failure to fulfil their obligations within the agreed-upon time frame, exacerbating their financial and professional difficulties.

18. Furthermore, the Respondent’s attempt to forfeit the amounts paid by the Complainants without any justifiable reason cannot be upheld. Builders cannot arbitrarily retain or forfeit payments when the delays and failures are on their part. Such actions constitute an unfair trade practice and a clear violation of the consumer's rights. The Respondents had no reasonable cause to hold back or forfeit the money, particularly when the delay in handing over possession was entirely attributable to their own shortcomings which had led even the Authority (GMADA) to issue Notice for terminating their Project.

19. In view of the aforesaid discussion, the Appeal is partly allowed and the Respondents are directed to refund to the Complainants the deposited amount along with interest @9% p.a. from the date of deposit till the date of realization. The Respondents are further directed to pay Rs. 50,000/- as costs of litigation to each of the Appellants. 

20. The Respondents shall comply with the above directions within 6 weeks of the date of this Order. Failure to comply with this Order within the stipulated time shall result in enhancement of interest to 12% p.a. till the date of final realization of any outstanding dues.

21. Pending application(s), if any, also stand disposed off as having been rendered infructuous.